Rice, carbon markets and the Environmental Defense Fund

USDA grant will allow the Environmental Defense Fund, in collaboration with Winrock International, to "demonstrate reductions in greenhouse gas emissions in rice production."
Project will involves rice fields in both California and Arkansas.
When complete, the findings will apply to other rice-growing states.
Aims to allow rice producers to engage in carbon markets.

USDA announced in June it would fund nine projects across the country focused on various aspects of greenhouse gas mitigation practices. The Obama administration hopes the projects will strengthen the backbone of markets concerned with carbon credits.

Among the projects announced by Agriculture Secretary Tom Vilsack was a $1.1 million grant to the Environmental Defense Fund (EDF) to “develop and implement a first-of-its-kind initiative to demonstrate reductions in greenhouse gas emissions in rice production.”

Belinda Morris, California regional director of EDF's Center for Conservation Incentives, spoke with Delta Farm Press about what the rice project hopes to accomplish, practices it will study, and how rice producers might profit. Among her comments:

Does this piggyback on the rice work you’ve already done in California?

“Yes, that was the start of this project. We initiated this project back in 2007 with the California Rice Commission to start looking at the potential of reducing methane emissions from rice production.

“We completed that project at the end of 2010 and ended up with a methodology that describes the practices landowners can participate in to reduce methane emissions…

“Now, we’re embarking on the second phase: $1.1 million from the USDA to test out the methodology and implement a carbon project on the ground. (We plan) to move it to a bigger scope and look to include Arkansas and other states in the South.”

The USDA seemed to indicate you’d be working in California for a while before coming to the Mid-South. Is that accurate or will you hit both locations at the same time?

“We’ll hit both locations at the same time. Right now, the way the methodology – the DNDC (DE-Nitrification De-Composition) model – is currently calibrated and validated for California. So, they’ve taken methane emissions measurements from practices in California and validated the model using those measurements.

“We now want to validate that same model in the Mid-South. It will be for the same practices (as in California). But there may be additional practices in the Mid-South we’re able to include in the methodology.

“The next steps in California are to implement the project on the ground, really understanding what it takes to do a project on the ground and to develop a user-friendly technology to reduce the transaction costs of using the methodology. Right now, it’s more expensive for a farmer or aggregator to access the model via the methodology. We want to develop a user-friendly interface for the farmer, perhaps even through an I-Pad application. They could enter information that would feed into the model, which would spit out the results showing the reductions in the practice.”

Practices

Actual practices developed in California?

“There are three practices we’ve included in the methodology.”

Reduction of winter flood.

“We actually put a restriction on that to only allow a 10 percent reduction in the overall area that is flooded. That’s because the winter flooding in California provides important habitat for migratory birds – waterfowl and other birds that come through in the winter season.

“In the project, we’re working with the Point Reyes Bird Observatory to analyze if 10 percent is the right number. So, we’ll be revisiting that percentage for that particular practice.

Morris points out the percentage reductions offered for the various practices “are estimates and dependent on a number of conditions in the field.”

Dry seeding.

“This is going in and seeding when the field is dry rather than when it’s wet. That lowers methane emissions around 4 percent.”

Removal of straw at harvest’s end.

“This is taking the straw off the field, baling and selling it. This is done rather than incorporating the straw into the soil before flooding it. That produces lower methane emissions.

“Baling the straw can produce around an 8 percent reduction in methane emissions.”

Any other practices you will research?

“Another practice we’ve looked at -- that we didn’t validate because in California it isn’t really a viable practice -- is mid-season drainage. Mid-season drainage is basically draining the field during a critical time during the growing season for a certain period of time.

“But it is a risk for (California) rice farmers because if the temperatures get too cold at night the plant can be sterilized. In California, where there are a lot of cold nights, it’s too risky and the potential yield loss is too great.

“In addition, in California, the fields are large and moving the water on and off is more complicated.

“During the previous project with USDA funding, we did a (mid-season drainage) trial with a farmer on a small field, about 27 acres. The yield loss was negligible, so low you wouldn’t necessarily attribute it to the practice. But there hasn’t been the scientific measurements done to sufficiently validate the model so it could be included in the methodology.

“However, in the Mid-South where temperatures are warmer, we think that could be a valid practice. And you actually get a bigger methane reduction from mid-season drainage.”

On other potential practices…

“In California, they dry down the fields about five days before harvest. By taking the flood away for a longer period – maybe up to 15 days before harvest – there is a methane emission reduction.

“Also, in California, a lot of fields have already been laser-leveled. In the Mid-South fewer fields have been. Laser-leveling of fields can also produce a reduction in methane emissions and, potentially, water savings.

“Another option is to look at rice varietals that produce lower methane emissions.”

Reviews and registries

“We actually submitted that to two carbon registries: the Verified Carbon Standard (VCS) and the American Carbon Registry (ACR). Currently, they both have the methodology out for public comment.

“They undergo different review processes. The VCS is currently being reviewed by a validator they’ve approved. That process should be through at the end of the summer. Then, it will go to a second validator and should come through the VCS process by sometime in late fall, certainly by the end of the year.

“For the ACR, we anticipate a much quicker process. They’ve done an initial review and come back with comments for us. We’ve addressed those comments. Now, they’ve put it up for public comment … for, I think, 30 days. They’ll put it out for scientific peer review, which will be done over the summer. They anticipate completing the whole process towards the end of the summer.”

So rice farmers in California will be able to sell carbon credits in 2012?

“In theory, an actual carbon project would start at the end of harvest. In all likelihood, it seems, we’ll have a methodology published in time for farmers to begin registering with a carbon registry.”

Markets will largely determine it, but any numbers being thrown around in terms of what this is potentially worth to the farmers?

“We’ve done some economic analysis.

“The break-even price in our analysis – and this is subject to a lot of conditions – of reduced winter flood is around $3 per acre. If the methodology is … adopted as the protocol used in the compliance system – and, according to current predictions, carbon prices increase to around $20 – then, a rice farmer using that practice (barring registration fees) would stand to make between $10 and $15 per acre.

“The break-even prices for the other practices are a bit higher.

“The break-even price for the removal of straw is quite a bit higher. But that’s due to the cost of removing the straw. Currently, there are markets some landowners are accessing to sell the straw. That brings the (break-even) price down and makes it a more viable practice. Revenue from carbon credits could potentially make other straw markets more accessible to rice farmers.”

On standardizing/verifying carbon sequestration/emission reductions and allowing the carbon markets to grow…

“For what’s currently out there in the voluntary market, we feel the VCS and ACR standards are the highest.

“However, our ‘gold standard’ goal is to get the California Air Resources Board to adopt one of these protocols. If they take on a rice protocol that means offsets from anywhere in the United States could be traded in a cap-and-trade compliance program.”

Partnerships, Mid-South

On the partnership with Winrock…

“We’re very much a partnership.

“Winrock is primarily responsible for working with the growers in Arkansas. When we established the collaboration, we did it because they have the relationships on the ground in Arkansas with the rice associations and growers.

“We have the relationships on the ground in California.

“More broadly, we’ve collaborated with the USA Rice Federation. They have great interest in doing this and making the methodology valid for the Mid-South states.”

Will you move into rice-growing states other than California and Arkansas?

“The way the project is written, we’ll only do on the ground projects in Arkansas and California. But we’ll make sure we have the right measurements from practices in the other states to feed into the DNDC model. (That would make) the methodology valid for use in most, if not all, the rice-growing states.”

Anything else EDF is working with in terms of the carbon markets?

“There’s currently an ACR protocol on fertilizer -- nitrous oxide emissions reduction from changes in application.

“That methodology uses the same DNDC model used in rice. (For fertilizer), we’ve been looking at trying to do the same type of project as we’re doing with rice. We have it laid out and have collaborated with the Western Growers Association and are hoping to collaborate with the California Farm Bureau to implement projects on the ground.

“Our collaboration with Western Growers is focused on fresh produce – primarily leafy greens and tomatoes. But we’re very interested in how that same protocol could be applied to corn production.”